I hope this doesn't turn out to be a weak attack. I don't understand this method; seems like the scanner companies have a pretty big vested interest in making sure no one is afraid to use their products as designed.

1) You can not invalidate somebody else patent in court based ON YOUR ACCTION. Somebody must sue you first, and then stick to it for long enough so you can pass motion for checking validity of given patent.

2) In US there is no record of who own which patent (apart from voluntary one, which even do not mandate need of checking out when you transfer patents, hence it may contain invalid data). So 40 shell companies are there to a) give multiple targets (in case someone do something with it) b) obfuscate to the maximium Real Party in Interest (who own patents, and who will benefit from it, and what other patents they hold).

1) You can not invalidate somebody else patent in court based ON YOUR ACCTION. Somebody must sue you first, and then stick to it for long enough so you can pass motion for checking validity of given patent.

2) In US there is no record of who own which patent (apart from voluntary one, which even do not mandate need of checking out when you transfer patents, hence it may contain invalid data). So 40 shell companies are there to a) give multiple targets (in case someone do something with it) b) obfuscate to the maximium Real Party in Interest (who own patents, and who will benefit from it, and what other patents they hold).

Regarding #1, it is possible file a declaratory judgment lawsuit to invalidate a patent based on a threat. You don't have to wait to be sued if you are being threatened, or you have customers who are being threatened. The scanner companies each have hundreds of customers (at least) who are being directly threatened with patent infringement suits.

As far as #2, yes, identifying the real party in interest would be a challenge. But they could start by just suing "AdzPro LLC" or whichever shell threatened one particular customer, and go from there.

Xerox and Ricoh both have enough money to directly attack these patents in court, and it's unclear why they're not doing so.

I don't think that Xerox an Ricoh would have any grounds for taking this directly to court. In the Lodsys case Apple is arguing that their license of the patents in question covered developers that were using their APIs. This makes Apple a relevant party in the cases and has standing to intervene in the lawsuits. This isn't true in this case since Xerox and Ricoh haven't licensed the patents are indeed aren't infringing as far as MPHJ is concerned, so they have no standing.

They could file amicus briefs or donate money to the defense of some individuals, but they can't be a party to the lawsuit themselves. And besides, these court cases can drag on forever as well. In the Apple vs Samsung case, some of the patent challenge decision came back before the trial went to jury and some after, but all are finalized now while the court case will still be dragging though appeals for many years. In addition, recent patent reform laws have make it easier to challenge patents with the PTO, so previous rules of thumb about relative speed/success of the PTO vs ITC vs the courts may no longer be accurate.

Finally, there are two ways of addressing this in court; either challenging the patent or challenging the infringement. In the later case if the users aren't infringing but the patent is still valid, then who is infringing - the manufacturer. They probably don't want to risk that argument being dredged out, so challenging the validity of the patent is the better approach.

Seems like it to me as well. Though I do wonder if Xerox and Ricoh might try to bring in other manufacturers of these kinds of equipment in if MPHJ doesn't knock it off. After all, a lot of business equipment vendors sell more than just one brand, and they all stand to lose customers and dealers if this keeps up.

1) You can not invalidate somebody else patent in court based ON YOUR ACCTION. Somebody must sue you first, and then stick to it for long enough so you can pass motion for checking validity of given patent.

2) In US there is no record of who own which patent (apart from voluntary one, which even do not mandate need of checking out when you transfer patents, hence it may contain invalid data). So 40 shell companies are there to a) give multiple targets (in case someone do something with it) b) obfuscate to the maximium Real Party in Interest (who own patents, and who will benefit from it, and what other patents they hold).

Regarding #1, it is possible file a declaratory judgment lawsuit to invalidate a patent based on a threat. You don't have to wait to be sued if you are being threatened, or you have customers who are being threatened. The scanner companies each have hundreds of customers (at least) who are being directly threatened with patent infringement suits.

As far as #2, yes, identifying the real party in interest would be a challenge. But they could start by just suing "AdzPro LLC" or whichever shell threatened one particular customer, and go from there.

I wasn't aware the bolded statement regarding customers being threatened was true. I would have assumed that because no action against Xerox or Ricoh had been made, and presumably neither held patents with which they could directly enter into suit against MBJH/etc on, they simply wouldn't have standing to sue.

I don't really understand why users should be sued for patent infringement. Their only action is purchasing a product (in this case a scanner) and then using it as it was designed. On the face of it, this doesn't break any law or any contract the users signed - it's the sort of thing that every company (or person) does all the time.

It would be difficult to prove that the people being sued are doing anything nefarious. So why should they be liable for something the maker of the equipment may have done? I have to wonder if this sort of legal liability was contemplated when the patent laws were written.

If this sort of action catches on it will make companies leery of buying any sort of technical product without indemnification against patent issues. Maybe something would be done to correct the problem at that point.

I'm a bit confused by this targeting of end-users. Maybe someone with more patent experience can answer this.

If I remember correctly, the patent involves scanning and directly sending the image in emails which is why it needs the combination of scanner and network. If the end-users aren't actually selling the setup, then on what legal basis can MPHJ sue? Is it because the end-users are technically "making money" by the use of this setup?

If this isn't the reason, then I don't see a difference between this and someone hacking their own version of a product for their personal use ... like the camera Rapid Strap which I've done.

I'm a bit confused by this targeting of end-users. Maybe someone with more patent experience can answer this.

If I remember correctly, the patent involves scanning and directly sending the image in emails which is why it needs the combination of scanner and network. If the end-users aren't actually selling the setup, then on what legal basis can MPHJ sue? Is it because the end-users are technically "making money" by the use of this setup?

If this isn't the reason, then I don't see a difference between this and someone hacking their own version of a product for their personal use ... like the camera Rapid Strap which I've done.

Patents can be infriged upon without COMMERCIAL use.

So end-users doing non-profit work are as liable as those doing serious business.

If I remember correctly, the patent involves scanning and directly sending the image in emails which is why it needs the combination of scanner and network. If the end-users aren't actually selling the setup, then on what legal basis can MPHJ sue? Is it because the end-users are technically "making money" by the use of this setup?

I believe the patent in question covers the process of converting a scanned document into an email and sending it over a network, not the actual hardware used. Think of it like a business practice or software patent, not an actual patent on a gadget of some kind.

I'm a bit confused by this targeting of end-users. Maybe someone with more patent experience can answer this.

If I remember correctly, the patent involves scanning and directly sending the image in emails which is why it needs the combination of scanner and network. If the end-users aren't actually selling the setup, then on what legal basis can MPHJ sue? Is it because the end-users are technically "making money" by the use of this setup?

If this isn't the reason, then I don't see a difference between this and someone hacking their own version of a product for their personal use ... like the camera Rapid Strap which I've done.

Patents can be infriged upon without COMMERCIAL use.

So end-users doing non-profit work are as liable as those doing serious business.

If that's the case, doesn't this mean most of the diy hacking community is at risk?

I don't really understand why users should be sued for patent infringement.

A patent provides the right to exclude others from making, using, selling, offering for sale, or importing the patented invention.

Nice going - taking part of my comment out of context. I understand that is the way the law is written. I don't understand why the law was framed in such a way that people who did not contribute to infringement (the end users) are held to be just as liable as the people who manufactured the product. It doesn't seem fair or equitable.

I think it is unlikely that Congress intended that a patent holder would be about to sue every person and every company using a product that is claimed to infringe their patent.

In one of the previous articles regarding this patent troll, I remarked on my surprise that the scanner companies weren't doing more to protect their customers. I'm happy to see that they are now doing just that, and I hope between this and the Vermont case, MPHJ will be done.

I don't really understand why users should be sued for patent infringement.

A patent provides the right to exclude others from making, using, selling, offering for sale, or importing the patented invention.

Nice going - taking part of my comment out of context. I understand that is the way the law is written. I don't understand why the law was framed in such a way that people who did not contribute to infringement (the end users) are held to be just as liable as the people who manufactured the product. It doesn't seem fair or equitable.

I think it is unlikely that Congress intended that a patent holder would be about to sue every person and every company using a product that is claimed to infringe their patent.

It wasn't out of context at all. The patent holder can sue whoever they want. I agree that it's unlikely that that was Congress' intention, but intention != reality.

Now, why is this particular company suing users? Because it's extortion that has not yet been proven to be illegal (afaik), and extortion is profitable.

First, to clarify, Xerox and Ricoh is not filing an inter partes reexam, they are filing an inter partes review. The reexam went away last year upon the implementation of the AIA. Ricoh made that clear in the first line of the pdf this article linked to.

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Ricoh both have enough money to directly attack these patents in court, and it's unclear why they're not doing so.

Second, Xerox and Ricoh probably filed an inter partes review because of the lower burden of proof to prove invalidity, only requiring preponderance of the evidence versus clear and convincing evidence with a trial.

Third, I don't think Xerox or Ricoh would have standing to bring this to federal court. True being threatened could be enough, but I personally don't think that threshold has been met here. Or at the very least, Xerox and Ricoh will probably have to litigate that issue. So why litigate that when you have the inter partes review available. It's a good strategic decision on the part of Xerox and Ricoh.

Xerox and Ricoh both have enough money to directly attack these patents in court, and it's unclear why they're not doing so.

Because Xerox and Ricoh have no standing to bring an action in court, at this point. They have not been threatened with infringement, so they cannot file a Declaratory judgment action for invalidity. The only legal means for them (presently) is to request reexamination proceedings in the USPTO.

If the proceedings are granted in the USPTO, then every accused defendant can request (and will almost automatically receive) a stay in the federal court proceeding while the USPTO action goes on -- yes, this can be for many years.

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I understand that is the way the law is written. I don't understand why the law was framed in such a way that people who did not contribute to infringement (the end users) are held to be just as liable as the people who manufactured the product. It doesn't seem fair or equitable.

I've read the claims of these patents. If they're valid (doubtful, but the reexamination proceedings will tell) then the end-user is the "direct" infringer. The scanner manufacturers would be "contributor" infringers and can be joined in the suit as committing "inducement" to infringe. However, to be liable for contributory infringement, the product at issue (the scanners) cannot have a "substantial non-infringing use" -- but if MPJH makes that allegation, then they risk invalidating their patents. Notice how in their demand letters that they're VERY careful to make it clear that the devices or software alone do not infringe. That's to avoid creating estoppel that might invalidate their claims AND (more importantly) to avoid giving Ricoh, Microsoft, etc. the basis for a declaratory judgment action.

These slimeballs (Farney, Rust, etc.) are trying to be very careful to avoid bringing a large, well-funded defendant into this action. Their business plan is to go after the "little guys" that do not have the resources or motivation to get involved in a large-scale patent litigation, because they didn't want a highly motivated defendant to challenge the validity of the patents or issues such as "inequitable conduct" (where a patent is procured based on fraud), etc.

I don't really understand why users should be sued for patent infringement.

A patent provides the right to exclude others from making, using, selling, offering for sale, or importing the patented invention.

Nice going - taking part of my comment out of context. I understand that is the way the law is written. I don't understand why the law was framed in such a way that people who did not contribute to infringement (the end users) are held to be just as liable as the people who manufactured the product. It doesn't seem fair or equitable.

I think it is unlikely that Congress intended that a patent holder would be about to sue every person and every company using a product that is claimed to infringe their patent.

The product, on it's own, does not infringe on the patent. The infringement occurs, according to MPHJ, when you use the product in a specific way, in combination with an internet-connected email system (and perhaps also with a non-internet-connected, but networked, email system?).

Put another way, as I understand it, the patent isn't for a machine capable of scanning to pdf and emailing it, but rather on the process of using a machine to scan to pdf and email it, whether it's one product being used, or 2, or 3, etc. I think.

Seems to me that a legitimate business wouldn't need 40 shell companies to operate. Going to such lengths means there's something shady going on, which there obviously is.

Also it's good to see some big manufacturers are stepping up. Targeting end users for non-existent patent infringement is almost as bad as what they do at Prenda.

Without a basic understanding of what a company is and how an entity can be used to address risk, taxation and a further multitude of issues 40 companies might seem excessive, it is not.

And I will be utterly lazy and say, 40 companies is not excessive in that it depends on the requirements or issues being addressed.

I would be somewhat concerned if I was reading 40 offshore shell companies from Jurisdictions in which discovery of the Companies executive, shareholders or other details where kept private. Surely a wonderful source of frustration to anyone digging up details of what is what and for what.

I don't really understand why users should be sued for patent infringement.

A patent provides the right to exclude others from making, using, selling, offering for sale, or importing the patented invention.

Nice going - taking part of my comment out of context. I understand that is the way the law is written. I don't understand why the law was framed in such a way that people who did not contribute to infringement (the end users) are held to be just as liable as the people who manufactured the product. It doesn't seem fair or equitable.

I think it is unlikely that Congress intended that a patent holder would be about to sue every person and every company using a product that is claimed to infringe their patent.

It wasn't out of context at all. The patent holder can sue whoever they want. I agree that it's unlikely that that was Congress' intention, but intention != reality.

Now, why is this particular company suing users? Because it's extortion that has not yet been proven to be illegal (afaik), and extortion is profitable.

What if the patent was on a particular type of physical product, and the 'users' are buying home-use kits that have multiple purposes, one of which could be to produce the patented product in question.

Do you sue the manufacturer of the equipment that has many non-infringing uses, or do you sue the users, specifically, that are illegally producing your patented product?

The law should allow for the latter when appropriate. Not allowing it when not appropriate is more difficult.

Regarding #1, it is possible file a declaratory judgment lawsuit to invalidate a patent based on a threat. You don't have to wait to be sued if you are being threatened, or you have customers who are being threatened. The scanner companies each have hundreds of customers (at least) who are being directly threatened with patent infringement suits. .

This is not true.

A supplier may have standing to file a declaratory judgment action when its customers are sued for patent infringement if:

Quote:

"(a) the supplier is obligated to indemnify its customers from infringement liability, or (b) there is a controversy between the patentee and the supplier as to the supplier's liability for induced or contributory infringement based on the alleged acts of direct infringement by its customers."Arris Grp., Inc. v. British Telecommunications PLC, 639 F.3d 1368, 1375 (Fed. Cir. 2011)

A declaratory judgment action requires an "actual case or controversy" between the parties. Since MPHJ hasn't accused the scanner makers of indirect infringement (i.e. (b) above), probably for just this reason, there is no actual controversy between them, at least not from a legal point of view.

I'm surprised that some "entrepreneur" hasn't tried offering "patent infringement insurance," with crap like this happening more and more frequently. (Yeah, I know it wouldn't work; but, that's never kept low-life creeps from scamming people in the past.)

A declaratory judgment action requires an "actual case or controversy" between the parties. Since MPHJ hasn't accused the scanner makers of indirect infringement (i.e. (b) above), probably for just this reason, there is no actual controversy between them, at least not from a legal point of view.

I concur. Given how strenuously MPJH has asserted that the scanners, alone, do not infringe and that there are substantially non-infringing uses for the technology, there is no evident basis for a declaratory judgement action by their equipment makers. This is not an accident (see my previous comment).

I'm surprised that some "entrepreneur" hasn't tried offering "patent infringement insurance," with crap like this happening more and more frequently. (Yeah, I know it wouldn't work; but, that's never kept low-life creeps from scamming people in the past.)

If I remember correctly, the patent involves scanning and directly sending the image in emails which is why it needs the combination of scanner and network. If the end-users aren't actually selling the setup, then on what legal basis can MPHJ sue? Is it because the end-users are technically "making money" by the use of this setup?

I believe the patent in question covers the process of converting a scanned document into an email and sending it over a network, not the actual hardware used. Think of it like a business practice or software patent, not an actual patent on a gadget of some kind.

I like to think of this as a "shell script" patent. This is something that any enthusiast could cobble together themselves with equipment and techniques commonplace 20 years ago.

I don't really understand why users should be sued for patent infringement.

A patent provides the right to exclude others from making, using, selling, offering for sale, or importing the patented invention.

Nice going - taking part of my comment out of context. I understand that is the way the law is written. I don't understand why the law was framed in such a way that people who did not contribute to infringement (the end users) are held to be just as liable as the people who manufactured the product. It doesn't seem fair or equitable.

I think it is unlikely that Congress intended that a patent holder would be about to sue every person and every company using a product that is claimed to infringe their patent.

The product, on it's own, does not infringe on the patent. The infringement occurs, according to MPHJ, when you use the product in a specific way, in combination with an internet-connected email system (and perhaps also with a non-internet-connected, but networked, email system?).

Put another way, as I understand it, the patent isn't for a machine capable of scanning to pdf and emailing it, but rather on the process of using a machine to scan to pdf and email it, whether it's one product being used, or 2, or 3, etc. I think.

That is just gibberish. It seems like a weak attempt at getting out from under being sued by every scanner manufacturer on the planet. These companies certainly should have a cause of action against the patent trolls. Their customers are being sued. Damage is being done to their business (both the end users and the scanner makers).

It wasn't out of context at all. The patent holder can sue whoever they want. I agree that it's unlikely that that was Congress' intention, but intention != reality.

Now, why is this particular company suing users? Because it's extortion that has not yet been proven to be illegal (afaik), and extortion is profitable.

What if the patent was on a particular type of physical product, and the 'users' are buying home-use kits that have multiple purposes, one of which could be to produce the patented product in question.

Do you sue the manufacturer of the equipment that has many non-infringing uses, or do you sue the users, specifically, that are illegally producing your patented product?

The law should allow for the latter when appropriate. Not allowing it when not appropriate is more difficult.

Apologies for bluntness, but what are you getting at? My interpretation is that you are stating what the law *should* be (and I tend to agree with you), but that's kind of the whole point of bring these things to light: what this company is currently doing* does not appear to be strictly illegal, so they are profiting off of it as much as possible.

The problem is that the law is different now; to change it, lawsuits and other legal proceedings are necessary, with their attendant rules and requirements. I am hesitant to let for-profits influence law very much, but in this case, consumer protection weighs more.

But all the major MFP makers sell scanner functionality with explicit instructions (manuals) on how to connect to any network email system, the software to configure them to do so, and the connectivity to perform this task.

As mentioned by others - they are not sued simply to keep a rich and very motivated opponent out of the court.

However, they should maybe get a client to drag them into court for "inducing" just so they can get a dog in the fight - "you sold me this item claiming it was OK, now I find I am being sued over your product."

It wasn't out of context at all. The patent holder can sue whoever they want. I agree that it's unlikely that that was Congress' intention, but intention != reality.

Now, why is this particular company suing users? Because it's extortion that has not yet been proven to be illegal (afaik), and extortion is profitable.

What if the patent was on a particular type of physical product, and the 'users' are buying home-use kits that have multiple purposes, one of which could be to produce the patented product in question.

Do you sue the manufacturer of the equipment that has many non-infringing uses, or do you sue the users, specifically, that are illegally producing your patented product?

The law should allow for the latter when appropriate. Not allowing it when not appropriate is more difficult.

Apologies for bluntness, but what are you getting at? My interpretation is that you are stating what the law *should* be (and I tend to agree with you), but that's kind of the whole point of bring these things to light: what this company is currently doing* does not appear to be strictly illegal, so they are profiting off of it as much as possible.

The problem is that the law is different now; to change it, lawsuits and other legal proceedings are necessary, with their attendant rules and requirements. I am hesitant to let for-profits influence law very much, but in this case, consumer protection weighs more.

While I am stating what the law should be.. I am also stating what the law is. I'm just stating that it's hard to have your cake and eat it too. "Punish those who deserve it without punishing any who don't"

I'd say the difference between my description and the case in question is that the scanners were advertised as having that feature, and there being no additional costs involved in using that feature. So the end-users are getting shafted.

On the other hand, if you were deciding whether to go after the manufacturer of a steel press or the users using it to copy your patented product, the decision to go after the user makes more sense. But the law doesn't differentiate, and I'm not sure how you could without being TOO specific, and leaving loopholes.